00:00I now recognize Mr. Hearn.
00:03Thank you, Mr. Chairman.
00:04Much has been talked about with the supplemental benefits of MA plans.
00:08In fact, about 99% of all the MA plans offer at least one supplemental benefit.
00:14And over the last several years, the MA program has endured significant funding reductions
00:19as a result of the Biden administration policy changes.
00:22Unfortunately, due to the past administration's heavy-handed actions towards MA,
00:27it's becoming harder for MA plans to offer a wide array of supplemental benefits for our seniors.
00:32Dr. Jain, can you explain how this rulemaking in the past four years around Medicare Advantage
00:39has affected the supplemental benefit offers to seniors?
00:42And can you tell us how plans are adjusting or working on this
00:46so that they can continue to offer these subtractive benefits to seniors?
00:50Sure. I would say there's been two different categories of changes that have been implemented in the program
00:55as it relates to rulemaking.
00:57So the first has really been risk adjustment and the implementation of the V28 risk model,
01:02which effectively has been a revenue haircut to the industry.
01:06And when the industry gets less revenue, we're able to offer less benefits.
01:10That's how the Medicare bid system actually works.
01:13So while V28 definitely addressed some of the types of coding abnormalities
01:18that have been, you know, discussed at this hearing,
01:21it certainly also reflected a cut in revenue to the industry,
01:26which translated into less generous benefits last year,
01:30will continue this year, and will also continue next year.
01:34The second area where CMS made changes was on the star ratings
01:38and the methodologies used to actually calculate the cut points for star ratings.
01:43And what we've seen is there's been a decline in the number of four-plus star rated plans across the industry.
01:49And what that means is that plans are achieving fewer bonus dollars
01:54and as a result are getting less revenue,
01:57and those bonus dollars are actually used to fund supplemental benefits.
02:00I would submit that one of the challenges has been that the star rating system has gotten more and more distorted.
02:06A single French phone call for SCAN Health Plan a couple of years ago would have been,
02:11that was a single secret shopper French phone call,
02:16was rated in a way that ultimately could have resulted in a $250 million swing in revenue to our plan.
02:24And for that reason we actually had to sue CMS in federal court and actually presided.
02:29And so I would just say we have a star rating system that is not necessarily doing what we hoped it would do,
02:35which is to reward quality and robust measures of quality.
02:39And I think one of the opportunities you have is to actually grade plans more on a continuum
02:44as opposed to have this cliff rating system which ultimately results in lower benefits to beneficiaries.
02:52Thank you. A lot has been talked about with MedPAC and some of the conclusions and how they've reached their conclusions.
02:59Dr. Miller, you touched on the MedPAC analysis in your testimony and you recently co-authored an article published by Health Affairs
03:08that discusses a recent analysis from MedPAC estimating cost differences between Medicare Advantage and fee-for-service.
03:15Can you talk to us about the findings that you wrote about in your article and what we need to know as policymakers as we go forward?
03:24I note that my views are mine and not those of MedPAC's as evidenced by that article.
03:30I would say that we need to answer three questions.
03:33One is we need to look at those three populations I mentioned, not just fee-for-service to MA,
03:38but people who switch from MA to fee-for-service and the choice that they make when they enter the program.
03:44MedPAC only looked at one of those three populations.
03:47So we're not getting a 360-degree view of the program.
03:51Favorable selection, coding intensity, coding intensity.
03:54We've talked many times and I talked about this at the JEC hearing a few months ago.
03:59We need to automate diagnosis coding at the point of care under the purview of a physician.
04:06So that way people are completely coded across programs, whether it's fee-for-service or MA.
04:12A lot of coding intensity differences are appropriate.
04:16Some of them are fraudulent, like what a large plan has potentially done sounds like it's problematic
04:22and there will be and should be oversight of that.
04:26Favorable selection, again, we need to look at how this happens in the real world.
04:32I don't know what the combine harvester is that a plan is driving down the coast of Florida
04:39to pick up all the healthy tennis playing Medicare beneficiaries.
04:44I don't know what the marketing strategy is.
04:46I don't know what the plan selection strategy is.
04:49I don't know what the benefit design strategy is.
04:51I was an FDA product reviewer and we deconstructed pharmaceutical development programs
04:57and then reconstructed what we thought the drug did and didn't do.
05:00And then validated that in the real world with pathophysiology of disease.
05:05We need to do that for all of the Medicare Advantage to fee-for-service comparisons
05:11and have transparency of the data and the statistical coding behind that.
05:15Thank you, Mr. Miller.
05:17And Mr. Chairman, I yield back.
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